Michael Phelps' rocky season took another turn for the worse when the 14-time Olympic gold-medallist was stunned in the world championships' 200 metre freestyle by his United States team-mate Ryan Lochte.
Lochte surged from third place over the last 100 metres to finish in 1 minute 44.44 seconds, 0.35 of a second ahead of Phelps with Germany's Paul Biedermann, the defending champion and world record-holder, third.
The result means Phelps, the Olympic champion and former world record-holder in this event, fails to regain the crown he lost to supersuit-wearing Biedermann two years ago.
South Korea's Park Tae-Hwan, who won the 400 metre freestyle on Sunday, was fourth with France's Yannick Agnel fifth.
Phelps remains on course for a possible five gold medals in Shanghai, which would match his haul in Rome two years ago.
He claimed bronze on Sunday when the United States suffered a rare defeat in the 4x100 metre freestyle relay.
Meanwhile Zhao Jing secured China's second swimming gold in another upset win when she beat Olympic title-holder Natalie Coughlin into third place in the women's 100 metre backstroke.
Zhao finished in 59.05 seconds, just one-hundredth of a second faster than 2009 silver-medallist Anastasia Zueva of Russia, with America's Coughlin third.
In Tuesday night's third final, Danish 800 metre world champion Lotte Friis built an early lead and stayed ahead to win the women's 1500 metre by six seconds from American world record-holder Kate Ziegler and China's Li Xuanxu.
Phelps has said he is into the final year of his career as he builds towards London 2012, where he will aim to add to his 14 Olympic titles -- including the record-breaking eight in Beijing.
The 26-year-old admits he has struggled for motivation in recent years, and has slumped to a series of shock defeats this season.